If the Consumer Price Index (CPI) increases from 100 to 125 and the nominal wage increases from $125 to $300, what is the change in the real wage?

The original Keynesian economic theory states that

A) the short-run aggregate supply (SRAS) curve is always vertical. B) many prices would not decline even when aggregate demand decreases. C) wages tend to fall more quickly than the overall price level. D) the economy naturally self-regulates so as to reach full employment quickly.

Suppose that at the current level of output, price = $100, MC = $100, AVC = $80, and ATC = $90. Which of the following is TRUE?

A) The firm should decrease output. B) The firm should shut down. C) The firm should increase output. D) The firm should maintain the current level of output.